The Community Rating System is a way for us at the Mitigation Division to recognize and credit the hard work that communities are doing to make their floodplains safer.

The CRS is a detailed and calibrated insurance rating system. But in concept, this is basically how the CRS works: local officials take certain steps—steps that we know work—to make their community safer from flood hazards. In return, we recognize those efforts and lower the cost of flood coverage throughout that community.

The lower rates available under the CRS are not a gift. They reflect how well community officials have reduced the flood hazard in their community, and the flood rates we charge in that community reflect that increased level of protection. (Often the successes under the CRS result from a partnership between the local governments, regional entities, State Floodplain Managers and the FEMA Regional insurance and mitigation staff that provide technical assistance.)

To judge how well a community exceeds the minimum required under the NFIP, we use a credit or a point system: a community may earn points for certain types of activities that help reduce flood hazards in the community. These credits then translate into overall community ratings with corresponding flood insurance reductions.

The NFIP’s community rating system for flood is similar to the Public Protection Grading system that insurance companies have used for setting premium rates for fire coverage.

There are ten rating classes under the Community Rating System. Class 1 requires the most credit points and gives the greatest premium reductions; Class 10 communities are communities under the NFIP that have not applied for the CRS and receive no discount. (The CRS, by the way, is a purely voluntary program for communities.)

Under the CRS, there are 18 activities recognized as measures that reduce or eliminate exposure to floods. Credit points are assigned to each of these 18 activities. The activities are organized under four main categories: Public Information, Mapping and Regulation, Flood Damage Reduction, and Flood Preparedness.

Once a community applies to the appropriate FEMA Region for acceptance into the CRS program and we verify the community’s activities, then Mitigation Division sets the CRS classification based upon the earned credit points. This CRS classification determines the premium discount for policyholders. Premium discounts, in recognition of the community’s flood hazard reduction activities, range from 5 percent to a maximum of 45 percent and apply to every policy written in that community. Nationwide, the 938 communities that participate in the CRS are receiving $75 million in discounts.

It’s not a stretch to point out that your work at the local level under CRS also furthers our efforts to operate the National Flood Insurance Program on a financially sound basis. When you elevate or floodproof risky buildings in your community, you’re reducing the buildings’ loss exposure. When you retrofit buildings at severe flood risk, you’re correcting the design and permit mistakes of the past and making the buildings less susceptible to flood damage. By floodproofing at-risk buildings, you’re making it far less likely that we’ll have to pay claims on those buildings under the NFIP or provide Federal disaster assistance funds.

And by helping to lower the costs of flood insurance in your community through the CRS, you are also helping us promote the sale of flood insurance. It’s obvious that lower flood insurance costs attract new customers and help us keep the policyholders we already have.

To ensure that our community ratings under the CRS are standard and consistent, we work with the Insurance Services Offices or ISO to help us analyze data from the community that we can translate into our rating for that community.